charter school
financial education
101
Financial Best Practices
KEY RESPONSIBILITIES OF
Finance & OPERATIONS
Teams
Business Team
Bookkeeping & Accounting
Budgeting
Financial Reporting & Forecasting
Human Resources
Payroll
Compliance
Development
Grant Management
Marketing & Recruiting
Internal Controls:
Are adequate controls in place to prevent errors and fraud?
M
ake certain there is an adequate segregation of duties between staff and outsourced
consultants Establish and follow financial policies & procedures (FPP)
Regularly educate staff on the FPP manual and revise when needed
C
reate “cheat sheet” flowcharts to summarize major processes from the FPP manual
Secure financial and human resource records in locked cabinets
S
tore funds to be deposited, stock of blank checks and credit/debit cards when not
being used in a locked safe
Resource Management:
Is there adequate staffing & are the right people in the
appropriate positions?
Create clear job descriptions and periodically review them with staff
Operations Team
Student Records
Student Enrollment & Withdrawal
Food Services
Transportation
Purchasing & Logistics
Facilities
Technology
Database Management
S
egregate finance & operations duties and establish professional development plans
for each role
I mplement a formal evaluation process for finance & operations staff that incorporates goal setting
Regularly review staff roles & responsibilities to maintain proper staffing levels
T
rain key staff on proper financial policies & procedures and the expectations of the
authorizer, auditors and donors
Financial Management:
Does everyone truly understand their role in managing the
school’s finances?
T
ake time to understand the school’s financial responsibilities, revenue streams, timing of payments
Identify information needs and reporting requirements of the school
M
ake certain the school’s chart of accounts and financial reports align with GAAP and provide the level of detail needed to manage the school effectively
Develop realistic (not hopeful) budgets with contingencies built in
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237 West 35th Street, Suite 301
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M
onitor income/expenses regularly against the budget and include projections
through the end of the fiscal year
Implement the CSBM Binder system to file financial documentation
Financial Reporting:
Do leaders have accurate financial information to manage
the school?
Establish a monthly close schedule as well as reporting deadlines
I ncorporate reconciliation processes into the monthly close for bank accounts, credit cards, payroll, revenue, etc.
Create useful financial reports on a monthly basis
Budget vs. Actuals with forecasts for the remainder of the fiscal year
Cash Projections (month by month to identify potential cash shortages)
Balance Sheet, Statement of Cash Flows and Grant Reports
Professionally develop staff and the board to read and interpret financial reports
Engage audit firm early
Risk Management & Legal:
Have leaders done everything possible to protect the school?
Maintain proper/adequate insurance
Review and update the HR manual as needed
Tip: Schools should conduct
a Finance & Operations
Assessment periodically to
ensure that the accounting and
financial operations, including
staffing, accounting processes,
procedures, internal controls,
and financial reporting are
working effectively.
L
imit access and use of credit & debit cards; if debit cards are used, establish a separate account to limit risk
Any score above 48 is doing
well, anything below may
mean that your department
requires improvement.
Have the school’s attorney review all hire/employment agreements
Avoid using petty cash if possible
M
aintain an attorney on the Board of Trustees (not to replace outside legal representation)
Obtain a pro bono attorney as a cost-effective way to get legal help for your school
Create a list of all risks and a plan to mitigate all risks
Start with this Mini Assessment
There is paper everywhere
in our finance office. We feel uncomfortable
when seeing it.
1 2 3 4 5 6 7 8 9 10
Our financial back-up documentation is
very neat and orderly. Items can be retrieved
within seconds.
We don’t understand revenue sources
and related cash flows. We don’t track
student enrollment closely.
1 2 3 4 5 6 7 8 9 10
We fully understand our sources of
revenues and related cash flows. We track
student enrollment very closely.
Our annual & multi-year budgets
do not provide as helpful information
as we would like.
1 2 3 4 5 6 7 8 9 10
Our annual & multi-year budgets are effective guides and are prioritized to leverage our
program and impact on our students.
Audited financial statements and
management letters contain several recommendations, which make me very nervous.
1 2 3 4 5 6 7 8 9 10
Audited financial statements and management
letters contain few recommendations, which
make me feel proud of my finance department.
1 2 3 4 5 6 7 8 9 10
The finance department is simply “on it.”
We can fully focus on academics.
1 2 3 4 5 6 7 8 9 10
We have built evidence toward
charter renewal throughout our
charter term.
Like this?
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The finance department appears
overwhelmed
237 West 35th Street,
Suite 301 and needs help.
New York NY 10001
info@csbm.comWe are unclear about academic
and financial requirements for the
charter renewal process.
888.710.2726 csbm.com